Buyers Beware: Owners are Selling Properties Targeted for Sea Level Rise Flooding Buyouts

The Miami Herald ran two articles (both behind paywalls/titles listed below) on Sunday that discussed how the Florida Keys and Miami-Dade County are managing properties targeted for buyouts due to storm surge and sea level rise flooding. The Florida Keys is making some slow process in purchasing distressed properties, while Miami-Dade County has dropped the ball completely. In both locales, some owners dazzled by rapidly appreciating real estate prices have resorted to selling properties to buyers after applying to buyout programs, which, unfortunately, puts the new buyers, wittingly or unwittingly, at risk of flooding complications.

Thousands of US coastal properties have been purchased through government buyouts over the last decade, and the trend is accelerating as the sea level rises. Often the buyouts occur after hurricane storm surges (which are growing more powerful and damaging as sea level rises) flood neighborhoods. Buyouts are also becoming more common in areas that experience so-called rainy day or nuisance flooding due to much higher than normal tides.

National and state governments are eager to remove properties that require frequent, expensive repair or replacement from repeated flooding from the insurance rolls. They also want to avoid the expense of maintaining critical infrastructure — such as roads, sewer and water systems, and storm drains — in flood-prone areas.

After Hurricane Irma sent a powerful and devastating storm surge into some of the Florida Keys in 2017, Monroe County acquired federal funding to buyout damaged and flood-prone properties. The county received 80 applications from real estate owners and has purchased nine properties. County officials hope to buy another dozen soon.

According to the Miami Herald article, one massive roadblock that has prevented more purchases is rapid appreciation in the housing market over the last couple of years. In some cases, owners who had agreed to the buyout and demolition of their frequently-flooded properties decided instead to sell them for prices higher than they would have received under the buyout program. To remedy the situation, the county has received permission to offer more money for properties from the state agency that’s coordinated the buyout funds.

Miami-Dade County initiated a similar buyout program, but in three years the county hasn’t purchased a single one of ten properties that were targeted by buyouts. The lack of performance has led to the state administrative agency taking back the funds that were to be used for the purchases. Some of the buyout eligible property owners are angry that the county failed to complete the purchases as promised. In one instance, a developer has purchased a flood-prone property with the intent of constructing an 11-unit building on the lot. The developer was unable to tell the county what steps it would take to flood-proof the property but the county approved the project anyway.

Buyouts are controversial but necessary in areas where properties cannot be protected from storm surge and sea level rise flooding. Buyout opponents believe no matter how many times a property floods, insurers and governments are responsible for helping them to repair the damage and maintain roads and water and sewer service. Proponents, however, recognize when the battle is lost and they appreciated the government assistance when they’re ready to move on.

The current situation where some homes targeted for buyouts are actually purchased and demolished while others are being sold to buyers with or without them being aware of the property’s flood status needs to be addressed. The fact is each state has its own seller disclosure laws, so too often buyers are left in the dark about the level of threat posed by storm surge and sea level rise flooding. Until this unfair situation is resolved, buyers need to gather information from more than just sellers to ensure they’re not purchasing a property that was targeted for a buyout unless they’re prepared to accept the risk that their investment will literally end up underwater.

Editor’s Note: Here are the paywall protected article titles “Miami-Dade failed to buy flooded homes; Now high-risk sites open to more development” and “Buyouts take flood-prone Keys properties off the market. There are more sellers waiting”.

U.S. Army Corps of Engineers to Reconsider Miami Storm Surge Plan

The U.S. Army Corps of Engineers folded to public opposition this week and agreed to hold off on a controversial plan to construct flood gates and high walls along the coast to prevent storm surge from inundating the city.

The Cops sent a letter to Miami-Dade County officials notifying them that they will spend over $8 million and up to five years working to come up with new plans that use more natural solutions to fending off storm surges in way that would also help Biscayne Bay, which is suffering environmental degradation due to sewage spills and other human activities. This basically takes the Corps back to square one after an initial $3 million and three years were spent drafting a plan to address storm surge.

Opposition to the initial plan came from residents who did not want to see the construction of tall and unsightly floodgates and walls blocking the view along the city’s coastline. The Corps had also proposed elevating flood-prone structures and buying out owners of properties that could not be saved. In addition to considering natural surge-control solutions, the corps has also agreed to consider other on-going projects — such as Everglades restoration — that could be impacted by its activities.

It’s important to note that the Corps’s proposed $4.6 billion surge-control project was not designed to eliminate or mitigate sea level rise flooding. Miami-Dade County has adopted its own strategy for dealing with sea level rise flooding. Some projects are already in the construction phase.

US Supreme Court’s Ruling Limiting the EPA’s Ability to Regulate Greenhouse Gases is a Blow to Sea Level Rise Real Estate

The U.S. Supreme Court’s decision today to limit the Environmental Protection Agency’s (EPA) ability to regulate the release of greenhouse gases by electrical power plants is a serious blow to efforts to fight overall global warming and the resultant sea level rise that threatens billions of dollars of real estate all along the U.S. coastline.

Scientists based their latest estimates on the amount of sea level rise U.S. coastal communities will experience between now and the end of the century on the assumption that regulators, like the EPA, would be able to force electrical power plants and other major greenhouse gas emitters to reduce their annual output. With no oversight from the EPA, the court is saying that the American public has to rely on Congress to pass specific legislation restricting emissions from individual sources. The reality of this situation is that Congress is heavily under the influence of fossil fuel — coal, oil and natural gas — producer campaign contributions, so getting meaningful regulations passed will be nearly impossible.

Where does this leave us? Quite frankly, living in a world that’s already overheating and experiencing longer, hotter and more deadly heatwaves, mega-droughts that threaten the very existence of cities in the American West, supercharged tropical storms, hurricanes and local rain events that bring devastating flooding, calamitous wildfires, and rising seas that are inundating coastal real estate.

The Supreme Court’s decision limiting the EPA’s ability to regulate greenhouse gas emissions will accelerate global warming. This will result in faster ocean expansion and ice melting in Greenland and Antarctica and, ultimately, sea level rise at the high end of expert forecasts. According to the National Oceanic and Atmospheric Administration website: “Current and future emissions matter. About 2 feet or sea level rise along the U.S. coastline is increasingly likely between 2020 and 2100 because of emissions to date. Failing to curb future emissions could cause an additional 1.5-5 feet of rise for a total of 3.5-7 feet by the end of this century.”

It’s important to keep in mind that many coastal communities are already spending millions of dollars combatting the sea level rise we’re already experiencing. Every additional inch between now and the 2100 will add to the burden and damage more and more public and private real estate and infrastructure. For example, if saltwater invades the water table and fouls freshwater wells, some cities and towns will find it hard to continue to exist.

The U.S. Supreme Court’s EPA decision is dangerous for the U.S. and the entire planet. The best we can do to protect our lives and property and the lives and property of others is to vote only for candidates who who are prepared to ignore old world energy producers and join the fight against climate change, global warming and sea level rise.

Hot Housing Market Chills Flood-Prone-Housing Buyout Programs

One tool local officials have to combat sea level rise flooding that damages residential real estate is home buyouts. According to an Associated Press article, the Federal Emergency Management Agency (FEMA) has spent nearly $3.5 billion over the last 30 years to help communities purchase nearly 50,000 flood-prone properties. Typically buyouts are used so communities and insurers don’t have to bear the cost of repairing or rebuilding houses that repeatedly flood.

The rapid appreciation in real estate value over the past year, however, is posing a challenge to officials trying to buyout flood-prone homes. According to the Associated press report, owners who would usually accept the terms of a buyout are now, in many cases, turning them down with the hope that a buyer will pay even more than the buyout program offers. Another reason some owners are reluctant to sell is that they realize that all the real estate in their community has been appreciating so finding a replacement home in a location that doesn’t flood at an affordable price can be quite a challenge.

In response to the real estate appreciation challenge, FEMA is offering more money — up to $31,000 — to help homeowners find affordable replacement housing. Some states are also offering extra money to people who agree to be bought out.

Refusing a buyout is not without risk for homeowners. If their house floods while it’s up for sale, it will be difficult to find a buyer willing to purchase it. This is an especially serious issue for property owners in coastal communities during hurricane season.

This buyout situation should serve as a cautionary tale for buyers. To avoid unknowingly purchasing a flood-prone home that really should be bought-out to stop the repair and rebuilding cycle, they need to perform due diligence and determine whether the risk is worth it to them. Some coastal states — like Florida — don’t have strong sellers’ flood disclosure requirements, so they will have to conduct research on their own to independently confirm whether a property is flood prone. FEMA flood maps, local real estate agents, insurers, and mortgage providers are a great place to start.

New “HazardAware” Website Gives Gulf Coast Real Estate Owners, Buyers Info on Risks Posed By Sea Level Rise and Climate Change

In the age of climate change and sea level rise, one of the most difficult tasks for real estate owners and buyers is to evaluate a property’s risk of damage from ever-worsening natural disasters. Experts from several universities have developed a new website called HazardAware to make the process of evaluation a little easier in Florida and coastal area counties in Alabama, Mississippi, Louisiana and Texas.

When real estate owners and buyers enter an address in a search window on the site, they’re given “A home’s HazardReady Score” which tells them whether a home is more or less resilient to natural disasters than average. They’re also given a wealth of data on a home’s, neighborhood’s and community’s risks for certain types of hazards, such as wind, tornadoes, flooding and hail, and a general analysis of the threat sea level rise poses to a property.

HazardAware also assists real estate owners and buyers by telling them what questions they should consider about a given property and what they can do to reduce their exposure to certain risks.

When I ran a couple of addresses that I’m familiar with on the HazardAware website, I received four pages of thought-provoking information, including links where I could get even more information about climate change, sea level rise, insurance and other relevant topics. (Oddly enough, for both properties located in South Florida and Southwest Florida HazardAware listed “Extreme Cold” as among the top four hazards based on insurance loss, which seemed a little suspicious.)

HazardAware also has a section that discussed the properties’ risk of sea level rise flooding based on a their status under FEMA’s Coastal High Hazard Areas program, but it didn’t really delve too deeply into the issue. At this point, real estate buyers and owners involved in property located near the coast may want to increase their knowledge of a property’s, neighborhood’s and community’s sea level rise flooding risk by visiting Climate Central and using its excellent hazard maps.

As with all online tools, HazardAware is a great place to gather general information about a property’s risk of damage from natural hazards, such as sea level rise, but owners and buyers still need to perform additional due diligence. For example, they need to verify information provided by the online tools and find out the specific insurance claims history of a property. They also need to further research the threat the natural hazard currently poses to a property, neighborhood and community, what is being done to address the threat, and how it will impact how much they will have to pay for property maintenance, insurance, and taxes, and, ultimately, how it will impact their property value.

Another critically important factor to research is the health of the loCAL mortgage and insurance industries. If providers of mortgages and/or insurance are struggling in an area, this could be a warning that the local real estate market is in jeopardy.

New Report Lists Boston Area Climate Change and Sea Level Rise Threats

Longer, hotter heatwaves, contaminated drinking water wells, and more coastal flooding are on tap for the Boston area due to climate change and sea level rise between now and the end of the century. That’s according to a study of 101 cities and towns in the Boston area released today by UMass Boston and the Greater Boston Research Advisory Group (CBRAG).

Among the findings included in the Climate Change Impacts and Projections for the Greater Boston Area report:

  1. Average annual temperatures could range from 3 to 10 degrees Fahrenheit higher by the end of this century compared with the start of the century.
  2. Days over 90 degrees could increase from an average of 10 to as many as 80 a year.
  3. Traditional food products, such as cranberries, maple syrup and lobsters and shell fish, could be lost. (Lobsters and some fish are already moving north to escape warmer ocean water.)
  4. Reduced snowpack and faster evaporation due to higher temperatures could lead to a reduction in groundwater needed for drinking water, agriculture and industry.
  5. Sea level rise could contaminate coastal drinking water wells by forcing salt water into fresh groundwater aquifers.
  6. Sea level rise could also boost the number of days Boston experiences sunny day or “nuisance flooding” from approximately 15 days a year to over 180 days.
  7. Quicker, more intense rain storms combined with higher seas and groundwater tables could lead to even worse flooding in coastal areas.
  8. Less hurricanes are expected to hit the region, but the ones that do are likely to be stronger and more damaging.

Researchers say the actual outcomes of their predictions will be influenced by the world’s ability to reach net zero emissions by 2050. Commenting on the report, Boston Mayor Michelle Wu said: “We know that the window of time to act on climate change is closing quickly and it is critical to align our policies and programs with the latest science. The CBRAG report analyzes Boston’s climate risk projections so we can make the most informed decisions on how to protect our communities from unavoidable impacts while mitigating emissions that contribute to climate change.”

Boston and the surrounding communities can use the report to map out their response to climate change and sea level rise challenges. Real estate owners and buyers in the affected region should stay up on the proposed solutions as they can impact their taxes, access to potable water, operational life of their septic systems where used, quality of life, and, ultimately, property value.

Sea Level Rise Flooding Threatens More Than Your Real Estate

When people who own real estate in coastal communities consider the threat posed by sea level rise flooding, they often focus only on their own structures and land. That can be a costly mistake.

The fact is sea level rise flooding outside their property lines can impact their property value, financial future and quality of life. How? For example, nearby roads that flood can keep owners from reaching their property. Wastewater systems that are infiltrated by seawater can become ineffective or even inoperable, which can result in sinks and showers that don’t drain and toilets that don’t flush. And taxes can go up when cities and towns are forced to raise seawalls and other critical infrastructure.

A Civil Grand Jury in Humboldt County in Northern California is busy drafting an assessment that lists the many ways sea level rise will impact coastal communities there. In a report titled “The Sea Also Rises”, the Grand Jury warns that the county, which includes Arcata and Eureka, is at risk from flooding due to the double-whammy of sea level rise and natural land subsidence.

The list of problems the Grand Jury says will be created as seawater inundates more and more land includes the following:

  1. Communities around Humboldt Bay will experience more frequent flooding.
  2. Highway 101 and the only access road to King Salmon could be cut off by floodwater.
  3. The local energy system could be disrupted as flooding impacts a PG&E generating station, municipal water transmission lines, electrical transmission towers, and transmission poles.
  4. An interim spent nuclear fuel site could be damaged.
  5. Commercial properties, including three cargo and commercial docks, could be flooded.
  6. Environmentally contaminated sites in the Arcata and Fairhaven could be compromised.

The Grand Jury isn’t only forecasting future problems, it’s taking stock of problems that exist today. For example, the report says property values in the Fairhaven/Finntown area are already suffering because very high tides are causing septic systems and leaching fields to fail — which is a problem in many coastal areas experiencing sea level rise flooding.

In its draft summary, the Grand Jury is calling on all elected officials to make sea level rise flooding a priority. “The County of Humboldt; the cities of Arcata and Eureka; and the Humboldt Bay Harbor, Recreation, and Conservation District should formally state their immediate and continuous support for, and commitment to, SLR (sea level rise) mitigation and adaptation efforts,” it wrote.

Cities and towns all along the US coastline are taking stock of the threats posed to residential and commercial real estate, public lands, and critical infrastructure. A few years ago, an environmental consultant estimated that the mid-sized South Florida city I live in needs to spend $378 million to defend itself against sea level rise. With inflation, it’s likely the actual cost is higher now.

Owners and buyers of real estate in coastal communities need to know what’s at-risk from sea level rise flooding in their community, how much it will cost to eliminate and mitigate the flood waters, how much local taxpayers will be expected to contribute to the effort, and the soundness and life-expectancy of the projects being implemented and those under consideration. Not knowing this critical information could lead to an unexpected loss of property value and spike in taxes and other expenses.

2021 Was a Record Year for Sea Level Rise, That’s Bad News for Coastal Real Estate

This week, the the World Meteorological Organization (WMO) reported that four key climate change indicators reached record highs in 2021. The amount of greenhouse gases in the atmosphere, ocean heat, ocean acidification, and sea level rise all broke records. The WMO also reported that the years 2015-2021 were the warmest since the industrial revolution–with 2016 being the hottest on record.

Professor Petteri Taalas, WMO Secretary-General, commented, “Our climate is changing before our eyes.”

In 2021, humans burned more fossil fuels — coal, oil and natural gas — which released more greenhouse gases into the atmosphere. The global warming we’re creating is what’s driving the sea level rise that’s already flooding coastal real estate.

The most disturbing findings for those who own or are interested in purchasing real estate vulnerable to sea level rise flooding: Ocean heating hit a record high in 2021, with the last two decades showing the greatest rate of temperature gains. (Ocean heating and expansion are a major driver of sea level rise.) In addition the rate of sea level rise is accelerating. It increased at nearly .18 of an inch per year from 2013-2021, a rate more than double the increase measured each year between 1993 and 2002.

There’s no sign in 2022 that humans are going to break their addiction to fossil fuels. According to basic science, that means the globe is going to continue to warm and sea level is going to continue to rise at an ever-accelerating rate. Flooding will, too.

Coastal real estate owners who are betting that they’ll be able to sell before the problem impacts their property value need to factor the rapid changes taking place on air, land and sea into their calculations.

Cape Hatteras Houses Collapse into Ocean: Is this the future of sea level rise?

When it comes to sea level rise damaging beachfront real estate, Cape Hatteras National Seashore in the Outer Banks of North Carolina is the canary in the coal mine. The thin, sandy barrier island is infamous for losing houses to the sea whenever there’s a hurricane or strong tropical storm.

Now, before hurricane season even begins, houses in Rodanthe, south of Nag’s Head, are being swept out to sea. The National Park Service says three houses have been lost to the waves since February and another nine are currently at-risk of the same fate.

There are several factors contributing to the string of house collapses. A low pressure system swirling off the Outer Banks is sending powerful waves crashing onto shore. In addition, the barrier island has long experienced erosion due to regular wave action that gets worse whenever a hurricane or tropical storm hits or even passes close to the area.

Experts, however, have predicted that higher seas due to sea level rise would serve to intensify and speed up the erosion and house destruction, which only makes sense. Higher seas scour away sand more quickly and effectively. They also mean storm surges will travel further inland with more punch. In addition, the warming of the oceans and atmosphere due to climate change is super-charging hurricanes and tropical storms, which means they pack a stronger wallop.

Home loss on the Outer Banks is also due to the unique geology of barrier islands. In their natural state, the narrow sandy strands are meant to migrate inland as sea level rises. The Park Service is allowed to protect critical infrastructure, such as roads, but not houses. Even if the Park Service could take steps to shield the houses, such as building seawalls, nature would eventually break through the armor and sweep them out to sea.

It’s important to note here that scientists blame the loss of houses not only on natural forces but also the fact that humans never should have built the homes on shifting barrier island sand to begin with. Real estate owners and buyers need to carefully consider the consequences of owning real estate on barrier islands and beaches all along the US coast, especially now that sea level rise is in play. One thing’s for sure, houses toppling into the sea are going to become more common as the sea level rises and storms intensify in the decades to come.

(Photo Credit: National Park Service)

Freddie Mac Warns Sea Level Rise is Not Priced into Coastal Florida Real Estate Values

If you want to see where the real estate market is headed in light of climate change and sea level rise, watch lenders and insurers. Why? They have to be forward looking to protect their investment.

With that in mind, a research brief published this month by Freddie Mac, a governmental-sponsored company that backs mortgages, should sound a wake-up alarm to real estate buyers and owners in Coastal Florida (and across the country). In the piece, titled “Homebuyers in Coastal Florida are Not Factoring Sea Level Rise Risk into Home Prices”, Freddie Mac reported that prices are not being discounted for properties that are in sea level rise (SLR) exposed areas not within FEMA-designated floodplains. In fact, researchers found buyers of a primary residence, individual investors, and institutional investors were paying a 3.5% price premium for these homes.

Freddie Mac also reported that homes located in areas vulnerable to sea level rise experienced price discounts after hurricane flooding likely because buyers perceived a heightened flood risk rather than due to the risk of sea level rise itself.

“We conclude that homebuyers either lack awareness of SLR risk or consider it a long-term risk that will not be a concern during the time they own a home,” the researchers said.

Freddie Mac is concerned that the failure to consider the threat sea level rise poses to a property now could eventually lead to sea level rise-driven price drops later when (and if FEMA) updates its flood maps to reflect sea level rise flooding. The researchers say Florida’s housing market, with its large share of vulnerable properties built at very low elevation, could be significantly impacted.

This is yet another example of why owners and buyers of coastal property need to assess the risk posed by sea level rise flooding to make informed decisions and protect their financial futures.

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